The Polish finance ministry has announced that the European Commission (EC) is expected to initiate an excessive deficit procedure (EDP) against Poland.
The objective of the excessive deficit procedure is for EU countries to correct their excessive deficits and/or debt levels.
The EC can launch the procedure if a country breaches the deficit threshold of 3% of GDP in the public finance sector, known as the general government deficit in the EU nomenclature.
The general government deficit reached 5.1% of Poland’s GDP in 2023, compared to 3.5% in 2022, the preliminary calculations of the country’s Central Statistical Office showed.
This year, the EU has returned to its fiscal policy guidelines, which have been frozen for 2020-2033 owing to the Covid-19 pandemic and war in Ukraine.
“According to the EC’s latest forecasts published this spring, the EC may place 13 EU countries, including Poland, under the excessive deficit procedure,” the finance ministry told Polish Press Agency (PAP) on Monday.
The ministry added that a similar situation occurred in 2009-2010 in the wake of the financial crisis. It also reported that Poland is in a dialogue with the EC to clarify the reasons for exceeding the limit.
“According to the Ministry of Finance, Poland’s high deficit is the result of the war in Ukraine and Poland’s massive spending on modernizing the army, reducing the impact of the energy crisis and helping refugees from Ukraine,” said the Polish finance ministry.
The ministry added that the EU is currently reforming its economic governance framework, including fiscal rules. New provisions will extend the period for correcting the excessive deficit and will be more lenient for countries with increased defense spending.
The EC can launch the procedure if a country breaches the deficit threshold of 3% of GDP in the public finance sector, known as the general government deficit in the EU nomenclature.
The general government deficit reached 5.1% of Poland’s GDP in 2023, compared to 3.5% in 2022, the preliminary calculations of the country’s Central Statistical Office showed.
This year, the EU has returned to its fiscal policy guidelines, which have been frozen for 2020-2033 owing to the Covid-19 pandemic and war in Ukraine.
“According to the EC’s latest forecasts published this spring, the EC may place 13 EU countries, including Poland, under the excessive deficit procedure,” the finance ministry told Polish Press Agency (PAP) on Monday.
The ministry added that a similar situation occurred in 2009-2010 in the wake of the financial crisis. It also reported that Poland is in a dialogue with the EC to clarify the reasons for exceeding the limit.
“According to the Ministry of Finance, Poland’s high deficit is the result of the war in Ukraine and Poland’s massive spending on modernizing the army, reducing the impact of the energy crisis and helping refugees from Ukraine,” said the Polish finance ministry.
The ministry added that the EU is currently reforming its economic governance framework, including fiscal rules. New provisions will extend the period for correcting the excessive deficit and will be more lenient for countries with increased defense spending.
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